Senate Republicans are wrestling over their next move on infrastructure after five of their GOP colleagues stood beside President Biden on Thursday to announce a bipartisan deal that is likely to pick up a lot of Democratic support.
But some Republican senators are already raising concerns about what’s in the plan and whether the proposed funding sources in the framework will really cover the cost of spending priorities.
Several GOP senators are questioning a provision that would provide $40 billion to beef up IRS enforcement, which is expected to generate an estimated $100 billion in new revenue that can be spent on infrastructure.
One GOP senator predicted that senators who are returning to their home states during the July 4 recess will hear complaints about the prospect of an avalanche of IRS audits in the coming years.
“I’m not sure how our people will feel about emboldening the IRS to go after taxpayers,” the lawmaker said.
Sen. Mike Rounds (R-S.D.), one of the 21 senators who endorsed a bipartisan infrastructure framework last week, said he’s uneasy about giving that amount of fresh funding to the IRS.
“I’m one of the skeptics on that,” he said. “But look, this is something Democrats wanted as part of the package. I don’t think it will achieve what they think it will achieve.”
Asked about the IRS concerns, Sen. Mitt Romney (R-Utah), one of the five Republicans in the bipartisan group of 10 senators who negotiated the framework, said Sen. Mike Crapo (R-Idaho), the ranking member on the Finance Committee, has tried to reassure nervous colleagues on that issue.
“Mike Crapo was there and he had some comments for our group about that that I thought were very helpful,” Romney said.
Overall, Senate Republicans say they’re getting conflicting advice within the party on the infrastructure deal.
Karl Rove, former President George W. Bush’s top strategist, recently told a group of GOP senators that it would be smart for them to support — or at least not kill — a bipartisan infrastructure bill because it would show voters that Republicans are willing to get things done when proposals are reasonable and have strong public support.
He argued it would give Republicans more credibility when they oppose some of Biden’s more controversial plans, such as injecting hundreds of billions of dollars in new spending to shift the United States to a green economy or dramatically expanding access to child care and expanding Medicare eligibility and coverage.
Rove reprised his argument in a Wall Street Journal op-ed Wednesday when he wrote: “Prudent bipartisanship gives Republicans greater credibility when they stand against other elements of the Biden agenda.”
But another highly respected Republican adviser, former Sen. Phil Gramm (Texas), recommended at a Senate Republican Steering Committee lunch that senators should keep their fingerprints off of Biden’s ambitious infrastructure spending proposals.
Gramm warned that Biden, with or without Republican support, is going to rack up a lot of federal debt at a time when economic indicators show inflation is already rising faster than expected. He told GOP lawmakers that it would be better if they were not part of a spending binge that could have unpredictable economic effects, according to Republican sources familiar with the meeting.
The uncertainty among Republicans over how to respond to the bipartisan infrastructure framework is reflected by Senate Minority Leader Mitch McConnell’s (R-Ky.) cautious approach to it.
McConnell told colleagues at a Senate Republican lunch Thursday that he is “still learning about it,” according to a senator in the room.
Later on Thursday afternoon, McConnell sounded less inclined to embrace the deal after Biden threatened to veto it unless Congress simultaneously passes a much larger reconciliation package packed with Democratic spending priorities. That legislation would need only Democratic votes under special budget rules.
“It almost makes your head spin,” McConnell complained on the Senate floor. “An expression of bipartisanship and then an ultimatum on behalf of your left-wing base.”
“Really, caving completely in less than two hours, that’s not the way to show you’re serious about getting a bipartisan outcome,” he added.
McConnell later told Fox News’s “Special Report” about his shift in expectations after Biden’s insistence on a separate reconciliation bill.
“I think we have gone from optimism to pessimism as a result of the president’s second press conference,” he said.
Growing political concern over inflation and its impact on the economy has made Republican senators even more sensitive about how to pay for the bipartisan framework, which is expected to cost $1.2 trillion over eight years.
GOP senators raised questions at Thursday’s lunch about the details of the proposed funding sources. Several voiced skepticism about whether they would really cover the cost of more than $500 billion in new spending, according to senators in the room.
“There were points of inquiry, there are a few areas where if we’re saying we’re going to pay for this we want to make sure we’re really paying for it,” said a Republican senator who attended the meeting. “There were some good questions about whether this or that pay-for is an area where we’re being too ambitious.”
One topic of debate was the extent to which public-private partnerships would generate investment activity.
Sen. Mark Warner (D-Va.), one of the principal negotiators, has suggested that an infusion of federal money could provide major returns in private investment, but other senators are skeptical.
Sen. Rand Paul (R-Ky.) said after the lunch that he’s just started to review the proposed offsets closely but noted they are not traditional spending cuts, such as repurposing military assistance slated for Afghanistan.
“The question is how we pay for it. I’ve been asking, where's the $50 billion we save a year in Afghanistan? Where’s the savings?” he asked. “That's how I'd pay for something like this. I'd quit spending it in Afghanistan and spend it here. If we had a pay-for like that, it would go further to convincing me.”
GOP senators are also concerned that they may get tied to the larger reconciliation package if they give Democratic moderates political cover by joining with them to pass the bipartisan infrastructure proposal.
Progressives are making clear they view the bipartisan framework and a multitrillion-dollar reconciliation package as part of the same deal.